Mazda CEO: To continue Ford alliance, not mulling ties with others

The head of Mazda Motor Corp. (7261.TO) Wednesday countered speculation that Ford Motor Co. (F) would be pulling the plug on its partnership with his company, saying the alliance between the two auto makers isn't over.

"We have an agreement with Ford under which we will continue to cooperate in areas of mutual benefit," chief executive Takashi Yamanouchi, said at a press conference.

The CEO didn't comment specifically on whether Ford will cut its stake in Mazda or is considering doing so.

While the U.S. auto maker currently holds an 11% stake in Mazda, a person close to the matter has said Ford is in talks to sell a large part of its shareholdings in Mazda and plans to reduce its stake to 3% or less.

But offering proof of the two companies' cemented partnership, the CEO noted the auto makers agreed to continue their alliance even when Ford slashed its stake in its Japanese partner from 33.4% to 13% two years ago. Ford's stake fell slightly afterwards as Mazda issued new shares last year.

"We are not considering alliances with others at all," Yamanouchi added.

Ford became Mazda's top shareholder in 1979, after buying 25% of its outstanding shares and raised its stake to 33.4% in 1996.

Under their existing tie-ups, the U.S. and Japanese car makers share the same platforms for some models, while they run joint production ventures in the U.S. and Thailand among other joint operations.

Yamanouchi made the remarks at a press conference where Mazda unveiled plans to launch a gasoline-engine powered compact that will be as fuel-efficient as some hybrid cars.

The redesigned Demio compact will be able to run for 30 kilometers on a single litre of gasoline. The Demio is known as the Mazda 2 overseas.

The new model's fuel-efficiency will be on par with those of Honda Motor Co.'s Fit hybrid compact and the Insight hybrid despite the two models being propelled partly by electric motors, though it will underperform the 38 kilometers per liter of Toyota Motor Corp.'s Prius.

The new Demio model will be powered by Mazda's next generation direct injection 1.3-liter gasoline engine with its high air-fuel mixture compression ratio of 14.0 enabling the compact to improve fuel-economy along with the idling-stop technology, Seita Kanai, a Mazda senior managing executive officer in charge of R&D operations, said. There are other technologies to increase the compact's fuel-efficiency but Kanai declined to disclose them.

As auto companies strive to meet higher fuel efficiency requirements worldwide, Mazda is set to become the latest Japanese company to offer conventional vehicles with fuel-economies approaching those of gasoline-electric vehicles. Nissan Motor Co. earlier this year rolled out its remodeled March compact that runs 26 kilometers a liter, while Daihatsu Motor Co. will market a mini vehicle model that goes 30 kilometers or more per liter.

"We will probably have to set the prices (for the new Demio) lower" than the starting price of Y1.59 million for the Fit hybrid, Yamanouchi told reporters after the press conference.

Mazda said that the new Demio will be introduced in Japan in the first half of 2011. The company will introduce some models with the next generation gasoline engine in North America next year and in Europe in 2012.

For the moment, Mazda relies heavily on its regular gasoline-powered cars. But the company will use Toyota Motor Corp.'s hybrid system components to launch a gasoline-electric powered car in Japan by 2013.